Although optimism is slowly creeping back to pre-crisis levels on Wall Street, that's apparently not quite the case at Barclays PLC.
The firm's investment banking arm is planning to lay off about 2.4 percent, or 600 of its global workforce at the end of the week, according to FINS.com , a Wall Street Journal site that focuses on careers.
The cuts are expected to be across the board, impacting a wide range of job functions and seniority levels, FINS.com reported, citing sources familiar with the matter.
"The layoffs are a dramatic reversal in strategy. In the year ended September 30, Barclays Capital added 2,000 workers, specifically building out its sales and trading desks. The bank has also been hiring in Canada and building out its wealth-management team in the U.S. The hiring produced results, as Barclays garnered a 25% increase in investment banking revenues in 2010, one of the biggest gains of the year, according to data from Thomson Reuters. However, the firm still only reached No. 8 on a ranking of banks by fees and the company's trading and principal investment operations slumped dramatically.
A pair of UBS analysts released a report early this month saying restructuring is due at Barclays. The Jan. 1 start of Robert E. Diamond Jr. as CEO presents a propitious time to shrink the institution, they argued.
The coming layoffs at Barclays Capital also highlight how fragile the finance industry's recovery is, since the firm is reportedly not the only one considering such drastic measures.
"Some other Wall Street giants find themselves in a similar situation. Morgan Stanley, for example, added almost 2,100 workers in the year-ended Sept. 30 and finished the year on top of many league tables. But the business boost wasn't cheap. The firm has frozen all hiring in its i-banking unit and plans to withold bonuses altogether from its subpar employees. Bank of America, meanwhile, has laid off about 400 people in its investment banking and capital-markets division."